Cite as Dreher v. B.A.T.F., 943 F.Supp. 680 (W.D.La. 1996)
Hugh T. Dreher, Plaintiff,
v.
United States of America, Bureau of Alcohol, Tobacco and Firearms,
Defendant.
Civil Action No. 3:96-1275.
United States District Court, W.D. Louisiana, Monroe Division.
Sept. 30, 1996.
Thomas Davenport, Jr., Carey B. Underwood, Davenport Files, &
Kelly, Monroe LA. for Hugh T. Dreher.
John A. Broadwell, U.S. Atty, Shreveport, LA for U.S. Bureau
of A.T.F.
MEMORANDUM RULING AND ORDER
MELANCON District Judge.
Before the Court are motions filed by both the Plaintiff and
Defendant. Defendant, the United States of America, Bureau of
Alcohol, Tobacco and Firearms, ("ATF"), moves to dismiss for lack
of subject matter jurisdiction pursuant to F.R.C.P. 12(b)(1) or, in
the alternative, for summary judgment pursuant to F.R.C.P. 56(c).
Plaintiff, Hugh T. Dreher ("Dreher"), filed an opposition to
defendant's motion to dismiss and a cross-motion for summary
judgment. For the reasons that follow, Plaintiff's motion for
summary judgment is denied, and Defendant's motion to dismiss is
granted.
Dreher, a convicted felon, lost his right to possess firearms,
upon his conviction for two counts involving the violation of Title
18, United States Code Section 371 and, Title 18, United States
Code Sections 1341 and 1342. Thereafter, he filed this action
against the ATF, seeking a declaration by this Court that he has
not been convicted of a crime punishable by imprisonment for a term
exceeding one year for purposes of 18 U.S.C. section 921 et seq.
or, alternatively, to restore his firearms privilege pursuant to 18
U.S.C. section 925(c).
Factual Background
Dreher entered a plea of nolo contendere before this court on
August 13, 1987 to two counts involving mail fraud: conspiracy to
commit mail fraud in violation of 18 U.S.C. section 371 (Count 1),
and mail fraud and aiding and abetting in violation of 18 U.S.C.
sections 1341 and 1342 (Count 18). The violations arose from
Dreher's fraudulent actions as outside contractor on a construction
project conducted by IPCO and its wholly owned subsidiary, Papco.
Count 1 charged that Dreher, as an outside contractor, conspired
with employees of Papco to bill IPCO and Papco for work and
materials supposedly supplied by Dreher but which in fact had been
furnished by IPCO and Papco. Count 18 charged the conspirators
with causing payments from IPCO and Papco to be delivered to Dreher
through the United States Postal Service.
Dreher was sentenced to 30 months imprisonment and was placed
on supervised probation for five years upon completion of his
prison term. He served his sentence and was discharged from
probation on November 4, 1994. Pursuant to the Gun Control Act of
18 U.S.C. section 922(g)(1) (1995), Dreher lost his right "to ship
or, transport in interstate or foreign commerce, or possess in or
affecting commerce, any firearm or ammunition, or to receive any
firearm or ammunition which has been shipped or transported in
interstate commerce.. . ."
In September of 1995, Dreher sought the restoration of his
firearm privileges pursuant to section 925(c), which permits a
convicted felon to apply to the Secretary of the Treasury for
relief from the firearms disabilities imposed federal law. Section
925(c) provides that the Secretary may grant such relief if it
determines that the applicant would not be likely to act in a
manner dangerous to the public. The Secretary has delegated the
authority to grant this relief to the ATF. 27 CFR section 178.44
(1996). Dreher's application
to the ATF for relief under section 925(c) received no response.
[footnote 1]
Dreher acknowledges, however, that prior to his filing a
complaint in this matter the ATF informed him that it could not act
on his request for relief under section 925(c) because Congress had
ceased to provide funding for this purpose. Memorandum in
Opposition to Defendant's Motion to Dismiss and in Support of
Plaintiffs Motion for Summary Judgment, p. 8. The Treasury, Postal
Service and General Government Appropriation Act, which became
effective in October of 1992, states that "[n]one of the funds
appropriated herein shall be available to investigate and act upon
applications for relief from Federal firearms disabilities under 18
U.S.C. section 925(c)." Treasury, Postal Service and General
Government Appropriations Act. 1993, Pub.L. No. 102-393, 106 Stat.
1725 (1992). Since 1992, Congress has continued to deny funds for
this purpose each fiscal year. See Treasury, Postal Service and
General Government Appropriations Acts Pub.L. No. 103-23, 107 Stat.
1226, 1228-29 (1993) ("Public Law 103-23"); Pub.L. No. 103-329, 108
Stat. 2382 (1994) ("Public Law 103-329"); Pub.L. No. 104-52, 109
Stat. 468, 471 (1995) ("Public Law 104-52").
Dreher brought an action before this Court seeking a
declaratory judgment he not be considered a convicted felon within
the meaning of the Gun Control Act or alternatively, for the
restoration of his firearm privileges pursuant to section 925(c).
ATF moves for summary judgment, contending that Dreher is a
convicted felon for purposes of the Gun Control Act. Mem. in Supp.
of Def's Mot. to Dismiss or, in the Alt., for Summ. J., pp. 7-12.
Dreher contests this assertion in his Cross-motion for summary
judgment. Mem. in Opp'n to Def's Mot. to Dismiss and in Supp. of
PI's Mot. for Summ. J., pp. 2-7.
The ATF also moves to dismiss Dreher's claim for restoration
of his gun privileges, stating that this court lacks subject matter
jurisdiction to hear the claim. Mem. in Supp. of Def's Mot. to
Dismiss or, in the Alt, for Summ J., pp. 12-23. Dreher opposes
this motion, arguing that this Court has jurisdiction. Mem. in
Opp'n to Def's Mot to Dismiss and in Supp. of Pl.'s Mot. for Summ.
J., pp. 7-12.
Analysis
The Gun Control Act
Plaintiff and Defendant's motions for summary judgment address
whether, as a matter of law, Dreher is a convicted felon for
purposes of the Gun Control Act. A motion for summary judgment
must be granted if the pleadings, depositions and affidavits show
that there is no genuine issue of material fact and that the moving
party is entitled to judgment as a matter of law. FED.R.Civ.P.
56(c).
The Gun Control Act applies to anyone who has been convicted
of "a crime punishable by imprisonment for a term exceeding one
year." 18 U.S.C. section 922(g)(1). Congress has carved out an
exception, however, for "offenses pertaining to antitrust
violations, unfair trade practices, restraints of trade, or other
similar offenses relating to the regulation of business." 18 U.S.C.
section 921(a)(20)(A). Dreher asserts that because his illegal
acts contained some of the same harmful elements as actions
proscribed by antitrust, unfair competition, and restraint of trade
laws, such as fraud, deceit and misrepresentation, his conviction
for mail fraud should qualify under the exception. See Mem. in
Opp'n to Def's Mot. to Dismiss and in Supp. of Pl.'s Mot. for Summ.
J., p. 4-7.
Section 921(a)(20)(A) excludes only those felons who have
violated laws which seek to foster a competitive marketplace.
"Antitrust notations" refers to violations of laws that promote the
unrestrained interaction of competitive forces within the market-
place. Northern Pacific Railway Co. v. United States, 356 U.S. 1,
4, 78 S.Ct. 514, 517-18, 2 L.Ed.2d 545 (1958); see Brunswick Corp.
v. Pueblo Bowl-O-Mat Inc., 429 U.S. 477, 488, 97 S.Ct. 690, 697, 50
L.Ed.2d 701 (1977); Brown Shoe Co. v. United States, 370 U.S. 294,
320, 82 S.Ct. 1502, 1521, 8 L.Ed.2d 510 (1962). "Unfair trade
practices," sometimes referred to as "unfair competition," occurs
when one entity passes off its products as those of another,
thereby harming consumers and other businesses. Kentucky Fried
Chicken Corp. v. Diversified Packaging Corp., 549 F.2d 368, 382
(5th Cir.1977); Volkswagenwerk Aktiengesellschaft v. Rickard, et
al., 492 F.2d 474, 478 (5th Cir.1974); see 15 U.S.C. section 45.
"Restraint of trade" is a common law term referring to contracts
that suppress competition, fix prices, partition markets, and
restrict production. Prepmore Apparel, Inc. v. Amalgamated,
Clothing Workers of America, AFL-CIO, 431 F.2d 1004, 1007 (5th
Cir.1970; Apex Hoisery v. Leader, 310 U.S. 469, 497, 60 S.Ct. 994,
84 L.Ed. 1311 (1940). The phrase "other similar offenses relating
to the regulation of business" must logically be interpreted as
violations of laws which likewise seek to enhance competition and
prevent injuries, to consumers and businesses.
The criminal statute under which Dreher was convicted, 18
U.S.C. sections 371, 1341 and 1342, do not seek to preserve
competition in the marketplace. They, criminalize the use of the
United States Postal Service for the purpose of fraudulently
obtaining money or property. [footnote 2] In Dreher's case, he
defrauded IPCO and Papco of money by falsely stating he had done
work and furnished supplies. Far from having the broad-based
harmful effects on competition and consumers sought to be prevented
by antitrust, unfair competition and restraints of trade laws,
Dreher's acts simply involved taking money from IPCO and Papco.
Therefore, this Court finds that the Gun Control Act applies
to Dreher as a convicted felon, and that the Plaintiff's motion for
summary judgment is denied.
Subject Matter Jurisdiction
In its motion to dismiss the ATF argues that this court lacks
subject matter jurisdiction to review Dreher's request for
restoration of his firearms privileges.
Section 925(c) of the Gun Control Act provides that anyone who
is denied relief from federal firearms disabilities under section
922(g) may seek judicial review in federal district court. 18
U.S.C. section 925(c). In 1994, however, Public Law 103-329
continued to suspend the ability of the ATF to deny, accept, or
investigate firearms relief applications. Therefore, the
jurisdiction of district courts can no longer be invoked under
section 925(c) because the ATF no longer denies relief from
firearms disabilities. Rather, the ATF is simply not authorized to
act in any way regarding applications for the restoration of gun
privileges. U.S. v. McGill, 74 F.3d 64, 66 (5th Cir.1996).
According to the language of section 925(c), only ATF denials of
firearms disabilities applications may be reviewed by district
courts.
Section 925(c) does not grant federal district courts original
jurisdiction over requests for firearms relief. As the Fifth
Circuit declared in U.S. v. McGill, 74 F.3d at 65-66, "we doubt
that the district court has original jurisdiction to consider an
application to remove the "federal firearm disability." [footnote
3] With facts much like this case, the Court in McGill affirmed the
district court's dismissal for lack of subject matter jurisdiction.
Dreher contends that a district court's jurisdiction over this
matter is supported by the fact that under section 925(c) a
district court's review of an ATF denial is not limited to the
administrative record, but may consider additional evidence when
failure to do so would result in a miscarriage of justice. See
Mem. in. Opp'n to Def's Mot. to Dismiss and in Supp. of Pl.'s Mot.
for Summ. J., p., 9. 1 The Fifth Circuit, however, has stated that
despite a district court's ability to consider additional evidence
in extraordinary circumstances, Congress intended for district
courts to review only denials of firearms relief applications.
McGill, 74 F.3d at 66.
Moreover, in passing Public Law 103-329, Congress could not
have contemplated that district courts would assume jurisdiction
over deciding applications to the ATF for firearms. A major reason
behind Congress' appropriations cutback was that ATF procedures for
considering applications involved extensive hours, investigative
expertise, and costs. McGill, 74 F.3d at 67, citing S.Rep. No.
353, 102nd Cong., 2d Sess. 77 (1992). It is highly unlikely that
Congress intended for district courts to take on these extensive
and costly investigations.
Dreher nevertheless points to a Third Circuit case which
stated that Congress has expressed no clear intent to deprive the
district courts of jurisdiction over firearms disabilities
applications to the ATF. Mem in Opp'n to Def's Mot. to Dismiss and
in Supp. of Pl.'s Mot. for Summ. J. p. 10, citing Rice v. United
States Dept. of Alcohol, Tobacco and Firearms, 68 F.3d 702, 707 (3d
Cir. 1995). The Fifth Circuit, however, provides the applicable
law for this court. In McGill, the Fifth Circuit stated that it
"cannot conceive that Congress intended to transfer the burden and
responsibility of investigating the applicant's fitness to possess
firearms from the ATF to the federal courts, which do not have the
manpower or expertise to investigate or evaluate these
applications." McGill, 74 F.3d at 67. [footnote 4]
In suspending ATF funds for the review of firearms
applications, Congress has indicated it will no longer spend
taxpayers' money to restore firearms to convicted felons. Instead,
Congress believes that its resources "would be better utilized to
crack down on violent crime." McGill, 74 F.3d at 67, citing S.Rep.
No. 353, 102d Cong., 2d Sess. 77 (1992).
For the above reasons, the Defendant's motion to dismiss is
granted.
Conclusion
This Court finds that Dreher's conviction for mail fraud does
not qualify for the exception for crimes relating to the regulation
of business under section 921(a)(20)(A). While the exception
clearly targets convictions under laws which aim at protecting
competition and consumers, the statute for mail fraud under which
Dreher was convicted merely seek to prevent fraud through the
mails, regardless of effects on competition or consumers.
Moreover, this Court does not have jurisdiction to review
Dreher's application for relief from federal firearms disabilities
under 18 U.S.C. section 925(c) because Congress has effectively
suspended the ability of the ATF to process applications by
convicted felons for the restoration of their firearms. According
to the language of the statute, district courts are authorized to
review only ATF denials of firearms disabilities applications.
ORDER
IT IS ORDERED that plaintiffs Motion for Summary Judgment be
and is hereby DENIED, and that the Motion to Dismiss filed by
defendant United States of America, Bureau of Alcohol, Tobacco and
Firearms is GRANTED, and that plaintiffs claims be DISMISSED WITH
PREJUDICE.
FOOTNOTES
1. Defendant admits that "[u]nfortunately, no relief application
file was ever opened by the ATF." Memorandum in Support of
Defendant's Motion to Dismiss or, in the Alterative, for Summary
Judgment, pp. 13.
2. A conviction for conspiracy under section 371 requires an
agreement between two or more persons to commit a crime against the
United States and an overt act in furtherance of that agreement
committed by one of the conspirators. United States v. Mackay, 33
F.3d 489, 493 (5th Cir. 1994). A conviction for mail fraud under
section 1341
requires a scheme to defraud involving the use of the mails for
the purpose of executing that scheme. United States v. Pazos, 24
F.3d 660, 665 (5th Cir.1994). Section 1342 involves the use of a
fictitious name while committing a violation under section 1341. 18
U.S.C. section 1342.
3. The Court in McGill, however, did not rule on whether a district
court maintained original jurisdiction over such claims. Instead,
it ruled on the merits of the case and determined that Congress'
spending limits were meant to suspend the firearms relief provided
by section 925(c). McGill, 74 F.3d at 66.
4. Prior to the McGill decision, a district court within the Fifth
Circuit had similarly concluded that Congress did not intend to
reassign the authority to grant federal firearms relief to district
courts. Mansen v. Bureau of Alcohol, Tobacco and Firearms, No.
4:93cv274, slip op. at 34 (E.D.Tex. January 20, 1995).